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Income Tax Appellate Tribunal, DELHI ‘SMC’ BENCH,
Before: SHRI N.K. BILLAIYA
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] – 13, New Delhi dated 13.03.2018 pertaining to assessment year 2014-15.
The sum and substance of the grievance of the assessee is that the Assessing Officer erred in confirming the action of the Assessing Officer in not allowing benefit of deduction of Rs. 15,35,551/- u/s 80P of the Income-tax Act, 1961 [hereinafter referred to as 'the Act'].
At the very outset, the ld. AR pointed out that the issue is squarely covered in favour of the assessee by the order of the Tribunal in assessee’s own case for A.Y 2012-13.
The ld. DR could not bring any distinguishing decision in favour of the Revenue.
I have carefully perused the orders of the authorities below. I find force in the contention of the ld. AR. The co-ordinate bench was seized with a similar issue in for A.Y 2012-13 and the matter was restored to the file of the Assessing Officer for fresh consideration of the claim of deduction u/s 80P of the Act. The relevant finding of the co-ordinate bench is as under:
“6. In my considered view, the mere fact that an assessee has deposited its operational funds in short term deposits, would not necessarily give the resultant interest income a colour of `Business income'. If a part of the operational funds is not required for the time being and the same is deposited in a bank and such deposit is not as a result of any business exigency or in other words, such deposit has no live link with the carrying on of business for which an assessee is set up, the character of `Business income' on such an interest income is lost.
7. In view of the fact that the additional evidence has been filed by the assessee under rule 29, which may have some bearing on arriving at the conclusion as to whether it was a case of deposit of surplus funds or a business necessity, I set aside the impugned order and remit the matter to the file of the Assessing Officer for considering the additional evidence filed by the assessee and then arrive at a positive conclusion as to whether it was a case of parking of surplus funds in the banks or not. In case the Assessing Officer comes to the conclusion that the business exigency required the assessee to deposit the money in the bank account, then deduction under section 80P would be allowed. In the otherwise scenario, if the Assessing Officer comes to the conclusion that it was a case of mere parking of surplus funds in the banks for the time being, then no deduction under section 80Pcan be allowed on such interest income. Needless to say, the assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings.”
Respectfully following the findings of the co-ordinate bench [supra], I restore the matter to the file of the Assessing Officer. The Assessing Officer is directed to decide the issue afresh in the light of the directions given by the Tribunal in A.Y 2012-13 after allowing reasonable opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee in is allowed.
The order is pronounced in the open court on 08.10.2018.